Indian telcos may offer better hikes next year to retain talent

On an average, employees at mobile-phone operators would get a pay-raise of 8.4%, compared with 7.5% in 2017, the driver being talent retention in a financially troubled industryDevina Sengupta&Sreeradha D Basu | ET Bureau | October 02, 2017, 09:42 IST

Employees in Indian telcos, now grabbing headlines for rising competition and falling profits, may find some cheer next year with compensation expert Aon Hewitt estimating better 2018 hikes than this year's record low increases.

On an average, employees at mobile-phone operators would get a pay-raise of 8.4%, compared with 7.5% in 2017, the driver being talent retention in a financially troubled industry. Aon Hewitt also said the top performers would get 1.8 times the average raise.

“Among the mobile-service providers, while some have done well on parameters such as revenue market share, others are projecting increases on account of the talent flux they are internally facing because of integration,“ said Anandorup Ghose, partner at Aon Hewitt India. The data was part of the company's India Salary Increase Survey (Phase I).

Also, telecom talent is more mobile in the sense that it can move across different industries. So, compensation growth must factor in the industries to which the talent may move, added Ghose. Bharti Airtel, Idea Cellular, Vodafone India and Reliance Jio Infocomm did not respond to ET's emails on the 2018 compensation outlook.

Indian service-providers have had a rough year warring on price points, and competition has hurt revenue and profitability, forcing rapid consolidation. Vodafone India and Idea Cellular, second and third on the leader-board, and are awaiting clearances for their merger, and so are Reliance Communications, Aircel and MTS.

In the past one year, rightsizing has shrunk the employee base in the sector where staff costs make up less than 5% of revenue.

The anticipated raise in 2018 is in line with Hewitt's projections for India Inc, which after an eight-year low of 2017 may raise wages by 9.6% on an average. In 2017, the average increase was 9.4%. The telecom industry had seen raises of even 17% a decade ago.

“After the approvals, telecom operators could roll out a 10-13% raise for employees to retain them instead of an average of 8-9% that was paid across the hierarchy,“ said A Ramachandran, partner at search firm of EMA Partners.